Rosneft CEO Sechin: Implementing price caps on energy is assault on market fundamentals, countries' rights to own resources

BAKU. Oct 27 (Interfax) - Implementing price caps on energy is an assault on market fundamentals and on the sovereign rights of countries to their own resources, Rosneft CEO Igor Sechin said at the XV Verona Eurasian Economic Forum in Baku, Azerbaijan.

Sechin cited the words of Russian President Vladimir Putin: "Today, the world is undergoing a profound transformation, and is entering a new period of upheaval and transformation (...) These serious challenges give everyone clear evidence that a multipolar world and true multilateralism are the only true path for the development of mankind."

"Indeed, the global transformation that humanity is currently experiencing is probably the largest tectonic shift in at least the last one hundred years," Sechin said.

"I want to draw your attention to the fact that neither the pandemic, nor especially the Ukrainian crisis, nor the problems of energy and the economy as a whole are in any way the main reason for the tectonic changes taking place in the world - the objective process of changing the global regulator - the hegemon, which arbitrarily appointed itself as such, inventing rules for the rest of the world and arbitrarily changing them as soon as they become unfavorable to it. In doing so, it must be understood that the United States is forced to fight in order to maintain its hegemony at any cost, and cannot afford to concede in this struggle, because the loss of hegemony - financial, military, political, and economic -- means the impossibility for them to reproduce themselves as a country, economy and political system," Sechin said.

Sechin also quoted Joe Biden as saying that the U.S. would continue to lead with the assistance of "diplomacy backed by the best fighting force in the world."

"Implementing these concepts has led to the fact that the policy has completely destroyed the economy. The energy market is the most striking illustration of this, the culminating sanctions pressure that has now resulted in subversive activities - in what has happened to Europe's gas transmission system - Nord Stream. There is no single energy market anymore. There are no rules. The high volatility that has happened over the past decade has now become limitless. The trends that we identified earlier, and those that may appear suddenly, each act independently, are not absorbed by each other, completely destroying the foundations of law, private property and the market like a cumulative projectile," Sechin said.

Sechin emphasized that implementing price caps on energy is an attack not only on market fundamentals, but also on the fundamentals of sovereignty: "So, the idea, in fact, is to abolish the sovereign rights of countries to their own resources, because countries that lack resources need them more than the 'wrong ones'. Naturally, no restrictions apply to the United States itself although a number of experts and politicians in Europe are already openly accusing the United States of profiting from the energy crisis they themselves have provoked, that is, from the problems of their allies. Nevertheless, European officials offer their rationalizations of the energy crisis that are far from common sense."

Sechin also emphasized that the sources of the current artificially created energy crisis "are not owing to the events in Ukraine and not because of the pandemic, rather owing to colossal underinvestment in the industry, and one of the reasons for this is the irresponsible policy of an accelerated 'green transition'; and further because of sanctions against Russia being a powerful additional catalyst for the energy crisis and inflation in general. It is now clear to many that the policy of 'green transition' has nothing to do with solving climate problems. Currently, the technologies necessary to implement a truly effective transition from traditional energy to low-carbon are absent," Sechin said.

Sechin added that oil and gas continue to be the world's main source of energy, reliably supplying more than 50% of global demand. Another 36% is coal, and its share is growing.

"Meantime, large investments in renewable energy, which over the past seven years have exceeded an incredible $2.6 trillion, have not produced results. The share of renewable sources have increased only three percentage points over the same period. This is the reason for underinvestment in traditional energy, as well as the current state of the global energy market," Sechin said.